What the audited numbers show in Collin and Dallas Counties
A collaboration between Lewis McLain & AI
The core assertions in the original post hold up. Texas school districts are adopting deficit budgets in large numbers, campuses are closing, and the funding formula has not kept pace with cost growth. But “the system is broken” is a conclusion, not a diagnosis. Five districts within a thirty-mile radius — Plano, Frisco, Richardson, McKinney, and Allen — all operate under the identical state formula, and their 2026-27 outcomes range from a balanced budget to a $44,800,000 shortfall. That spread is where the real explanation lives.
Every figure below for fiscal year 2025 is audited. All five districts received unmodified opinions.
Two corrections before going further
The average teacher salary figure of $63,749 is one year stale. That was the Texas Education Agency’s calculation before last year’s statewide raises took effect. The current TEA figure is $68,001, against an NEA-computed national average of $76,552. Texas ranks 29th nationally in average teacher pay — the third consecutive year at that position. Adjusted for inflation, Texas teachers earn 3.67% less than in 2017, a compound annual real decline of 0.47% over eight years. That is the more durable number, and the one worth citing.
Second, the post’s framing implies inaction. The 89th Legislature appropriated $8.5 billion in new public education funding through House Bill 2 in June 2025. What it did not do is raise the basic allotment meaningfully — the per-student allotment moved from $6,160 to $6,215, an increase of 0.89%, with most of the $8.5 billion routed into teacher pay mandates and program-specific allotments rather than the base amount districts can deploy against inflation. That distinction separates “the state spent nothing” (false) from “the state spent a great deal in ways that do not close operating deficits” (demonstrably true, as the five districts below prove).
| District | County | Revenue | Expenditures | Deficit | Deficit as % of expenditures |
|---|---|---|---|---|---|
| Plano ISD | Collin | $634,600,000 | $691,600,000 | $44,800,000 | 6.48% |
| Richardson ISD | Dallas | $403,800,000 | $427,700,000 | $20,800,000 | 4.86% |
| Allen ISD | Collin | $220,700,000 | $226,000,000 | $5,314,470 | 2.35% |
| McKinney ISD | Collin | $276,000,000 | $282,000,000 | $5,800,000 | 2.06% |
| Frisco ISD | Collin | $751,900,000 | $751,900,000 | $0 | 0.00% |
Every one of these boards adopted in June 2026. Every one operates under the same basic allotment, the same tax compression schedule, the same special education and transportation mandates, and the same House Bill 2 allotments. Four of the five are in the same appraisal district. The 6.48-point spread between Plano and Frisco is not a difference in state treatment.
The audited picture: fiscal year ended June 30, 2025
Adopted budgets are projections. The annual comprehensive financial reports are the ground truth, and they change the story materially.
| District | Revenues | Expenditures | Net change in fund balance | Ending fund balance |
|---|---|---|---|---|
| Frisco ISD | $754,569,861 | $733,947,380 | +$22,494,543 | $263,799,633 |
| Plano ISD | $686,920,617 | $677,146,430 | +$3,386,247 | $276,399,468 |
| Allen ISD | $214,896,617 | $216,790,527 | −$916,685 | $73,258,476 |
| McKinney ISD | $256,206,330 | $267,673,202 | −$10,711,346 | $99,861,556 |
| Richardson ISD | $414,279,418 | $430,319,383 | −$16,993,327 | $166,520,684 |
Note McKinney. Its adopted 2025-26 budget anticipated a $7,500,000 draw. The audited fiscal 2025 result was a $10,711,346 decline — 9.69% of beginning fund balance in a single year, the steepest proportional drawdown of the five. Richardson’s larger dollar decline was 9.26% of its beginning balance.
| District | Total fund balance | Unassigned | Total FB as % of expenditures | Unassigned as % of expenditures | Unassigned as % of total FB |
|---|---|---|---|---|---|
| Plano ISD | $276,399,468 | $82,118,880 | 40.82% | 12.13% | 29.71% |
| Richardson ISD | $166,520,684 | $108,523,219 | 38.70% | 25.22% | 65.17% |
| McKinney ISD | $99,861,556 | $93,080,833 | 37.31% | 34.77% | 93.21% |
| Frisco ISD | $263,799,633 | $248,420,281 | 35.94% | 33.85% | 94.17% |
| Allen ISD | $73,258,476 | $50,220,294 | 33.79% | 23.17% | 68.55% |
This is the finding that only the audits produce. Rank the districts by total fund balance and Plano leads at 40.82%. Rank them by usable reserves and Plano finishes last, at 12.13% — less than half the next-lowest and roughly a third of McKinney’s and Frisco’s.
Only 29.71% of Plano’s general fund balance is unassigned. McKinney’s is 93.21% unassigned and Frisco’s is 94.17% — essentially unencumbered. The difference is that Plano’s board has pre-committed the balance: $170,000,000 assigned to cash flow requirements, $10,000,000 to insurance deductible, $7,800,000 to the following year’s budgeted deficit, and $4,577,161 to purchases on order — $192,377,161 in total assignments. McKinney carries $2,550,000. Frisco carries $14,388,186.
| District | Days of operations, total FB | Days of operations, unassigned | Unassigned ÷ adopted FY27 deficit |
|---|---|---|---|
| Plano ISD | 149.0 | 44.3 | 1.83 years |
| Richardson ISD | 141.2 | 92.1 | 5.22 years |
| McKinney ISD | 136.2 | 126.9 | 16.05 years |
| Frisco ISD | 131.2 | 123.5 | Not applicable — balanced |
| Allen ISD | 123.3 | 84.6 | 9.45 years |
Plano holds 44 days of unassigned reserves. McKinney holds 127 — nearly triple, on a district roughly 40% Plano’s size. The district running the largest deficit in absolute dollars and the highest deficit as a share of expenditures also has the least discretionary cushion behind it.
McKinney’s board policy sets a floor at three months of operating expenses, or 25%. At $267,673,202 in fiscal 2025 general fund expenditures, that floor is $66,918,301 — leaving $26,162,532 of headroom above policy, or 4.51 years at the adopted $5,800,000 deficit. That is materially better than the estimate available from board presentations alone, which suggested roughly 2.6 years.
Frisco’s audit states the reserve convention explicitly: the standard practice is roughly 25% of annual expenditures, and Frisco has deliberately raised its own target to about 30% to absorb enrollment decline without leaning on additional state aid. Its unassigned balance at June 30, 2025 equals 32.6% of the fiscal 2026 adopted budget.
Variable one: recapture exposure
Chapter 49 recapture does more work in this comparison than any other single line item, and the audited figures make the disparity unmistakable.
| District | Amount | % of GF expenditures | Per student |
|---|---|---|---|
| Plano ISD | $136,249,803 | 20.12% | $3,110 |
| Frisco ISD | $13,398,645 | 1.83% | $205 |
| McKinney ISD | $7,041,655 | 2.63% | $302 |
| Richardson ISD | $5,452,555 | 1.27% | $147 |
| Allen ISD | $3,423,716 | 1.58% | $170 |
Plano remitted 20.12% of its total general fund expenditures to the state in fiscal 2025 — more than one dollar in five, before a single teacher was paid. Frisco, a district with a larger budget, remitted 1.83%. Per student, Plano’s recapture burden is roughly fifteen times Frisco’s and twenty-one times Richardson’s.
The mechanism deserves stating plainly, because it is counterintuitive and it is the heart of the problem. Recapture is calculated on taxable value per student in weighted average daily attendance. When a district loses students but retains its property wealth, value-per-student rises, and the recapture obligation rises with it. Plano’s certified net taxable value grew from $61,900,000,000 in tax year 2021 to $74,400,000,000 in tax year 2025 — 20.09% cumulative, a compound annual growth rate of 4.71% across four growth periods — while enrollment fell at a compound annual rate of 5.21%.
So Plano loses formula revenue on the way out and pays more recapture on the way in. Each departing student subtracts state entitlement and simultaneously increases the share of local collections classified as excess wealth. The district is penalized twice for the same demographic event, and it has no policy lever that touches either side. Richardson’s audit documents the inverse: the September 2025 amendment reflecting House Bill 2, Senate Bill 4, and Senate Bill 23 reduced its recapture, because the enlarged homestead exemptions cut taxable value 5% against a budget built on 5% growth.
McKinney’s audit isolates the same pressure at smaller scale. Its $10,711,346 general fund decline is attributed in part to a $1,610,473 increase in recapture — a 29.65% jump in one year — alongside a $14,300,000 drop in state program revenue.
This is the single most important specific to add to the original post. Underfunding and recapture are different problems requiring different legislative fixes. A basic allotment increase helps Richardson, McKinney, and Allen considerably. It helps Plano far less, because a meaningful share of any increase is recaptured back. Districts on Plano’s side of the line need the wealth-per-student threshold indexed, not just the allotment raised.
Variable two: enrollment and cost per pupil
| District | Prior | Current | One-year change | Multi-year CAGR |
|---|---|---|---|---|
| Plano ISD | 43,808 (2025-26) | 41,830 (2026-27 proj.) | −4.52% | −5.21% (2024-25 to 2026-27) |
| Allen ISD | 20,140 (2025-26) | 19,575 (2026-27 proj.) | −2.81% | −3.15% (Oct. 2024 to 2026-27) |
| Frisco ISD | 66,698 (FY2024) | 65,289 (FY2025) | −2.11% | −1.22% from 2023 peak |
| Richardson ISD | 36,970 (2024-25) | 36,247 (2025-26) | −1.96% | −0.44% over five years |
| McKinney ISD | 23,306 (FY2024) | 23,296 (FY2025) | −0.04% | −0.68% over nine years |
| District | Enrollment CAGR, 2016–2025 | Operating cost per pupil, 2016 | 2025 | Cost per pupil CAGR |
|---|---|---|---|---|
| Frisco ISD | +2.28% | $7,276.48 | $10,297.80 | +3.93% |
| McKinney ISD | −0.68% | $9,112 | $13,527 | +4.49% |
Both districts’ own statistical schedules tell the same story from opposite demographic positions. Frisco grew enrollment 2.28% annually for a decade; McKinney shrank 0.68% annually. Cost per pupil rose 3.93% and 4.49% respectively. Growth did not protect Frisco and stability did not protect McKinney, because in both cases per-pupil cost outran the basic allotment, which rose 0.89% in the same period that these districts absorbed compounding increases in salary, utilities, insurance, and mandated services.
McKinney is the cleanest proof available that this is not an enrollment story. Its enrollment fell 10 students last year — 0.04%. It still drew $10,711,346 out of fund balance.
Richardson supplies the second control case. Its five-year decline is 2.2%, a 0.44% compound annual rate, and it still adopted a $20,800,000 deficit and drew $16,993,327 in fiscal 2025.
The state demographer attributes the broader regional decline to out-migration toward the outer ring counties — Rockwall, Wise, Parker, Johnson, Ellis — and to falling birth rates. Neither originates in Austin. Any honest version of this argument concedes that some North Texas district distress is demographic. But McKinney and Richardson demonstrate that demographics are not the binding constraint.
| District | Primary approach | Documented actions | Result |
|---|---|---|---|
| Frisco ISD | Revenue generation | Renegotiated TIRZ agreement with City of Frisco permitting operating use (+$29,000,000 GF revenue in FY2025); Access Frisco open enrollment (870 students, $8,400,000); tuition pre-K (600 students); fare-based busing; $20 Chromebook fee; $21,800,000 personnel savings via attrition | FY2025 closed +$22,494,543 against a budgeted −$30,800,000; FY2027 balanced with 2% raises, rate held at $1.0194 |
| Richardson ISD | Expenditure reduction | $25,700,000 in cuts this cycle; nearly $42,000,000 over three years; four elementary consolidations plus Dobie Pre-K Center | $20,800,000 deficit remains; another $20,000,000 sought in August |
| McKinney ISD | Facility consolidation | Three elementary closures (Eddins, McNeil, Wolford) effective fall 2026; position eliminations cut the budgeted FY26 draw from $17,000,000 to $7,500,000 | $5,800,000 deficit; audited FY25 draw $10,711,346 |
| Allen ISD | Administrative attrition | More than $8,000,000 reduced in a single year, primarily administrative positions | $5,314,470 deficit; FY2025 draw only $916,685 |
| Plano ISD | Not yet restructured | Four campus closures approved June 2024; $5,200,000 annual savings, $20,100,000 one-time capital savings, $340,000,000 avoided future replacement cost | $44,800,000 deficit; leadership states structural change now required |
The TIRZ finding reframes the Frisco story. The commonly cited elements — open-enrollment transfers, tuition pre-K, bus fares, device fees — total roughly $10,000,000. The renegotiated tax increment reinvestment zone agreement with the City of Frisco, which permitted the district to apply TIRZ proceeds to operating costs rather than only construction, added $29,000,000 to general fund revenue in a single year. That is nearly three times the fee-and-transfer package.
Frisco balanced its budget primarily by finding a municipal partner willing to redirect an existing revenue stream. That is a genuine achievement and a replicable strategy only where a city has an active TIRZ and a cooperative council. It is not available to Plano, Richardson, McKinney, or Allen on comparable scale, and it should not be presented as evidence that better management alone closes these gaps.
The transfer program does carry a second-order consequence worth naming. Those 870 students came from somewhere, and in Collin County the somewhere is Plano, McKinney, Allen, and Prosper. In a county where every district is shrinking, one district has begun competing directly for average daily attendance — a rational response by a single board and a destructive equilibrium if all of them adopt it.
The non-recurring revenue problem, across all five
Two districts posted fiscal 2025 gains. Neither is repeatable.
Plano’s fund balance grew $3,386,247, from $273,013,221 to $276,399,468 — 1.23%. The growth came from a $22,600,000 initial Chapter 313 payment from Texas Instruments and a $31,400,000 state aid increase driven by an Available School Fund per-capita rate that rose from $423.747 to $619.868 per average daily attendance. The unassigned balance also rose partly for a mechanical reason: the assignment for budget deficit dropped from $35,000,000 to $7,800,000 as the prior-year deficit failed to materialize.
Frisco’s $22,494,543 gain came against a budgeted $30,800,000 deficit — a favorable swing of $53,294,543 — attributed by its audit largely to the TIRZ reallocation. A revenue stream can only be reallocated once. Frisco’s fiscal 2027 revenue of $751,900,000 is already down $19,790,000, or 2.56%, from the $771,690,000 budgeted for fiscal 2026.
McKinney shows what the year looks like without a one-time item: state program revenue fell $14,300,000, or 25%, expenditures rose 5%, and the fund balance absorbed $10,711,346.
Every one of these districts is one non-recurring item away from the structural gap becoming fully visible. Plano arrives there first because its recapture obligation compounds against it.
What this adds up to
The original post’s underlying claims survive scrutiny. Deficit budgets are widespread. Campuses are closing. Teacher compensation trails inflation in real terms. Mandated programs are underfunded — Plano projects six required programs costing $141,300,000 in 2026-27 against $66,900,000 in state funding, a $74,400,000 local subsidy for services no district may legally decline.
What the audited specifics add is precision about the mechanism. This is not uniform starvation. It is a formula in which per-pupil cost growth of roughly 4% annually meets a basic allotment that moved 0.89%, and in which one district’s recapture obligation consumes 20.12% of its budget while a larger neighbor’s consumes 1.83%. Plano and Frisco sit eleven miles apart under identical law, with a 6.48-point difference in fiscal outcome and a 44-day versus 124-day gap in usable reserves. That is a structural design problem, and a basic allotment increase alone will not solve it.
The 2027 session will decide two things: whether the basic allotment gets indexed to anything, and whether the education savings account program expands from $1 billion toward the $3.3 billion the Legislative Budget Board projects for 2028. More than 274,000 families applied for roughly 90,000 available accounts, leaving a waitlist above 180,000 students — now the most potent political argument in the building.
Districts should expect both dollars to be argued over at once, and expect the basic allotment to lose that argument again unless someone makes the recapture case with numbers this specific.
Note on data and method
Fiscal 2025 general fund figures for all five districts are audited, drawn from each district’s annual comprehensive financial report for the year ended June 30, 2025. All five received unmodified opinions — Weaver and Tidwell for Plano and Richardson, Hankins Eastup Deaton Tonn & Seay for Allen, Eide Bailly for McKinney. Fiscal 2026-27 figures are budgets as adopted in June 2026 and are projections, not actuals.
Percentage changes spanning more than one year are stated as compound annual growth rates; single-year changes are stated as simple percentage change. Days of operations are computed as fund balance divided by total general fund expenditures divided by 365. Recapture is function 91, contracted instructional services between public schools; per-student recapture uses each district’s most recent reported enrollment. McKinney and Frisco enrollment and cost-per-pupil figures are from ACFR statistical schedules and are fiscal-year figures on those districts’ own operating-expenditure definitions, which differ slightly — McKinney excludes debt service and most capital, Frisco excludes intergovernmental charges — so the cost-per-pupil CAGRs are comparable in direction but not to the decimal. Other districts’ enrollment is school-year data from board presentations.
One caution on the reserve comparison. The cash flow assignment — $170,000,000 at Plano — is technically available but functionally is not, because Texas districts collect the bulk of ad valorem revenue between December and February and need working capital to cover July through November payroll. Frisco’s audit describes the same four-to-five month cash flow deficit but carries the equivalent cushion as unassigned rather than assigned, and McKinney does likewise. Part of the 44-day versus 127-day gap is a real difference in liquidity and part is a difference in classification convention. The direction of the finding survives the adjustment, but the precise day counts should be treated as indicative rather than exact, and anyone using this comparison in testimony should say so.
Five Districts, One Formula
What the audited numbers show in Collin and Dallas Counties
The core assertions in the original post hold up. Texas school districts are adopting deficit budgets in large numbers, campuses are closing, and the funding formula has not kept pace with cost growth. But “the system is broken” is a conclusion, not a diagnosis. Five districts within a thirty-mile radius — Plano, Frisco, Richardson, McKinney, and Allen — all operate under the identical state formula, and their 2026-27 outcomes range from a balanced budget to a $44,800,000 shortfall. That spread is where the real explanation lives.
Every figure below for fiscal year 2025 is audited. All five districts received unmodified opinions.
Two corrections before going further
The average teacher salary figure of $63,749 is one year stale. That was the Texas Education Agency’s calculation before last year’s statewide raises took effect. The current TEA figure is $68,001, against an NEA-computed national average of $76,552. Texas ranks 29th nationally in average teacher pay — the third consecutive year at that position. Adjusted for inflation, Texas teachers earn 3.67% less than in 2017, a compound annual real decline of 0.47% over eight years. That is the more durable number, and the one worth citing.
Second, the post’s framing implies inaction. The 89th Legislature appropriated $8.5 billion in new public education funding through House Bill 2 in June 2025. What it did not do is raise the basic allotment meaningfully — the per-student allotment moved from $6,160 to $6,215, an increase of 0.89%, with most of the $8.5 billion routed into teacher pay mandates and program-specific allotments rather than the base amount districts can deploy against inflation. That distinction separates “the state spent nothing” (false) from “the state spent a great deal in ways that do not close operating deficits” (demonstrably true, as the five districts below prove).
| District | County | Revenue | Expenditures | Deficit | Deficit as % of expenditures |
|---|---|---|---|---|---|
| Plano ISD | Collin | $634,600,000 | $691,600,000 | $44,800,000 | 6.48% |
| Richardson ISD | Dallas | $403,800,000 | $427,700,000 | $20,800,000 | 4.86% |
| Allen ISD | Collin | $220,700,000 | $226,000,000 | $5,314,470 | 2.35% |
| McKinney ISD | Collin | $276,000,000 | $282,000,000 | $5,800,000 | 2.06% |
| Frisco ISD | Collin | $751,900,000 | $751,900,000 | $0 | 0.00% |
Every one of these boards adopted in June 2026. Every one operates under the same basic allotment, the same tax compression schedule, the same special education and transportation mandates, and the same House Bill 2 allotments. Four of the five are in the same appraisal district. The 6.48-point spread between Plano and Frisco is not a difference in state treatment.
The audited picture: fiscal year ended June 30, 2025
Adopted budgets are projections. The annual comprehensive financial reports are the ground truth, and they change the story materially.
| District | Revenues | Expenditures | Net change in fund balance | Ending fund balance |
|---|---|---|---|---|
| Frisco ISD | $754,569,861 | $733,947,380 | +$22,494,543 | $263,799,633 |
| Plano ISD | $686,920,617 | $677,146,430 | +$3,386,247 | $276,399,468 |
| Allen ISD | $214,896,617 | $216,790,527 | −$916,685 | $73,258,476 |
| McKinney ISD | $256,206,330 | $267,673,202 | −$10,711,346 | $99,861,556 |
| Richardson ISD | $414,279,418 | $430,319,383 | −$16,993,327 | $166,520,684 |
Note McKinney. Its adopted 2025-26 budget anticipated a $7,500,000 draw. The audited fiscal 2025 result was a $10,711,346 decline — 9.69% of beginning fund balance in a single year, the steepest proportional drawdown of the five. Richardson’s larger dollar decline was 9.26% of its beginning balance.
| District | Total fund balance | Unassigned | Total FB as % of expenditures | Unassigned as % of expenditures | Unassigned as % of total FB |
|---|---|---|---|---|---|
| Plano ISD | $276,399,468 | $82,118,880 | 40.82% | 12.13% | 29.71% |
| Richardson ISD | $166,520,684 | $108,523,219 | 38.70% | 25.22% | 65.17% |
| McKinney ISD | $99,861,556 | $93,080,833 | 37.31% | 34.77% | 93.21% |
| Frisco ISD | $263,799,633 | $248,420,281 | 35.94% | 33.85% | 94.17% |
| Allen ISD | $73,258,476 | $50,220,294 | 33.79% | 23.17% | 68.55% |
This is the finding that only the audits produce. Rank the districts by total fund balance and Plano leads at 40.82%. Rank them by usable reserves and Plano finishes last, at 12.13% — less than half the next-lowest and roughly a third of McKinney’s and Frisco’s.
Only 29.71% of Plano’s general fund balance is unassigned. McKinney’s is 93.21% unassigned and Frisco’s is 94.17% — essentially unencumbered. The difference is that Plano’s board has pre-committed the balance: $170,000,000 assigned to cash flow requirements, $10,000,000 to insurance deductible, $7,800,000 to the following year’s budgeted deficit, and $4,577,161 to purchases on order — $192,377,161 in total assignments. McKinney carries $2,550,000. Frisco carries $14,388,186.
| District | Days of operations, total FB | Days of operations, unassigned | Unassigned ÷ adopted FY27 deficit |
|---|---|---|---|
| Plano ISD | 149.0 | 44.3 | 1.83 years |
| Richardson ISD | 141.2 | 92.1 | 5.22 years |
| McKinney ISD | 136.2 | 126.9 | 16.05 years |
| Frisco ISD | 131.2 | 123.5 | Not applicable — balanced |
| Allen ISD | 123.3 | 84.6 | 9.45 years |
Plano holds 44 days of unassigned reserves. McKinney holds 127 — nearly triple, on a district roughly 40% Plano’s size. The district running the largest deficit in absolute dollars and the highest deficit as a share of expenditures also has the least discretionary cushion behind it.
McKinney’s board policy sets a floor at three months of operating expenses, or 25%. At $267,673,202 in fiscal 2025 general fund expenditures, that floor is $66,918,301 — leaving $26,162,532 of headroom above policy, or 4.51 years at the adopted $5,800,000 deficit. That is materially better than the estimate available from board presentations alone, which suggested roughly 2.6 years.
Frisco’s audit states the reserve convention explicitly: the standard practice is roughly 25% of annual expenditures, and Frisco has deliberately raised its own target to about 30% to absorb enrollment decline without leaning on additional state aid. Its unassigned balance at June 30, 2025 equals 32.6% of the fiscal 2026 adopted budget.
Variable one: recapture exposure
Chapter 49 recapture does more work in this comparison than any other single line item, and the audited figures make the disparity unmistakable.
| District | Amount | % of GF expenditures | Per student |
|---|---|---|---|
| Plano ISD | $136,249,803 | 20.12% | $3,110 |
| Frisco ISD | $13,398,645 | 1.83% | $205 |
| McKinney ISD | $7,041,655 | 2.63% | $302 |
| Richardson ISD | $5,452,555 | 1.27% | $147 |
| Allen ISD | $3,423,716 | 1.58% | $170 |
Plano remitted 20.12% of its total general fund expenditures to the state in fiscal 2025 — more than one dollar in five, before a single teacher was paid. Frisco, a district with a larger budget, remitted 1.83%. Per student, Plano’s recapture burden is roughly fifteen times Frisco’s and twenty-one times Richardson’s.
The mechanism deserves stating plainly, because it is counterintuitive and it is the heart of the problem. Recapture is calculated on taxable value per student in weighted average daily attendance. When a district loses students but retains its property wealth, value-per-student rises, and the recapture obligation rises with it. Plano’s certified net taxable value grew from $61,900,000,000 in tax year 2021 to $74,400,000,000 in tax year 2025 — 20.09% cumulative, a compound annual growth rate of 4.71% across four growth periods — while enrollment fell at a compound annual rate of 5.21%.
So Plano loses formula revenue on the way out and pays more recapture on the way in. Each departing student subtracts state entitlement and simultaneously increases the share of local collections classified as excess wealth. The district is penalized twice for the same demographic event, and it has no policy lever that touches either side. Richardson’s audit documents the inverse: the September 2025 amendment reflecting House Bill 2, Senate Bill 4, and Senate Bill 23 reduced its recapture, because the enlarged homestead exemptions cut taxable value 5% against a budget built on 5% growth.
McKinney’s audit isolates the same pressure at smaller scale. Its $10,711,346 general fund decline is attributed in part to a $1,610,473 increase in recapture — a 29.65% jump in one year — alongside a $14,300,000 drop in state program revenue.
This is the single most important specific to add to the original post. Underfunding and recapture are different problems requiring different legislative fixes. A basic allotment increase helps Richardson, McKinney, and Allen considerably. It helps Plano far less, because a meaningful share of any increase is recaptured back. Districts on Plano’s side of the line need the wealth-per-student threshold indexed, not just the allotment raised.
Variable two: enrollment and cost per pupil
| District | Prior | Current | One-year change | Multi-year CAGR |
|---|---|---|---|---|
| Plano ISD | 43,808 (2025-26) | 41,830 (2026-27 proj.) | −4.52% | −5.21% (2024-25 to 2026-27) |
| Allen ISD | 20,140 (2025-26) | 19,575 (2026-27 proj.) | −2.81% | −3.15% (Oct. 2024 to 2026-27) |
| Frisco ISD | 66,698 (FY2024) | 65,289 (FY2025) | −2.11% | −1.22% from 2023 peak |
| Richardson ISD | 36,970 (2024-25) | 36,247 (2025-26) | −1.96% | −0.44% over five years |
| McKinney ISD | 23,306 (FY2024) | 23,296 (FY2025) | −0.04% | −0.68% over nine years |
| District | Enrollment CAGR, 2016–2025 | Operating cost per pupil, 2016 | 2025 | Cost per pupil CAGR |
|---|---|---|---|---|
| Frisco ISD | +2.28% | $7,276.48 | $10,297.80 | +3.93% |
| McKinney ISD | −0.68% | $9,112 | $13,527 | +4.49% |
Both districts’ own statistical schedules tell the same story from opposite demographic positions. Frisco grew enrollment 2.28% annually for a decade; McKinney shrank 0.68% annually. Cost per pupil rose 3.93% and 4.49% respectively. Growth did not protect Frisco and stability did not protect McKinney, because in both cases per-pupil cost outran the basic allotment, which rose 0.89% in the same period that these districts absorbed compounding increases in salary, utilities, insurance, and mandated services.
McKinney is the cleanest proof available that this is not an enrollment story. Its enrollment fell 10 students last year — 0.04%. It still drew $10,711,346 out of fund balance.
Richardson supplies the second control case. Its five-year decline is 2.2%, a 0.44% compound annual rate, and it still adopted a $20,800,000 deficit and drew $16,993,327 in fiscal 2025.
The state demographer attributes the broader regional decline to out-migration toward the outer ring counties — Rockwall, Wise, Parker, Johnson, Ellis — and to falling birth rates. Neither originates in Austin. Any honest version of this argument concedes that some North Texas district distress is demographic. But McKinney and Richardson demonstrate that demographics are not the binding constraint.
| District | Primary approach | Documented actions | Result |
|---|---|---|---|
| Frisco ISD | Revenue generation | Renegotiated TIRZ agreement with City of Frisco permitting operating use (+$29,000,000 GF revenue in FY2025); Access Frisco open enrollment (870 students, $8,400,000); tuition pre-K (600 students); fare-based busing; $20 Chromebook fee; $21,800,000 personnel savings via attrition | FY2025 closed +$22,494,543 against a budgeted −$30,800,000; FY2027 balanced with 2% raises, rate held at $1.0194 |
| Richardson ISD | Expenditure reduction | $25,700,000 in cuts this cycle; nearly $42,000,000 over three years; four elementary consolidations plus Dobie Pre-K Center | $20,800,000 deficit remains; another $20,000,000 sought in August |
| McKinney ISD | Facility consolidation | Three elementary closures (Eddins, McNeil, Wolford) effective fall 2026; position eliminations cut the budgeted FY26 draw from $17,000,000 to $7,500,000 | $5,800,000 deficit; audited FY25 draw $10,711,346 |
| Allen ISD | Administrative attrition | More than $8,000,000 reduced in a single year, primarily administrative positions | $5,314,470 deficit; FY2025 draw only $916,685 |
| Plano ISD | Not yet restructured | Four campus closures approved June 2024; $5,200,000 annual savings, $20,100,000 one-time capital savings, $340,000,000 avoided future replacement cost | $44,800,000 deficit; leadership states structural change now required |
The TIRZ finding reframes the Frisco story. The commonly cited elements — open-enrollment transfers, tuition pre-K, bus fares, device fees — total roughly $10,000,000. The renegotiated tax increment reinvestment zone agreement with the City of Frisco, which permitted the district to apply TIRZ proceeds to operating costs rather than only construction, added $29,000,000 to general fund revenue in a single year. That is nearly three times the fee-and-transfer package.
Frisco balanced its budget primarily by finding a municipal partner willing to redirect an existing revenue stream. That is a genuine achievement and a replicable strategy only where a city has an active TIRZ and a cooperative council. It is not available to Plano, Richardson, McKinney, or Allen on comparable scale, and it should not be presented as evidence that better management alone closes these gaps.
The transfer program does carry a second-order consequence worth naming. Those 870 students came from somewhere, and in Collin County the somewhere is Plano, McKinney, Allen, and Prosper. In a county where every district is shrinking, one district has begun competing directly for average daily attendance — a rational response by a single board and a destructive equilibrium if all of them adopt it.
The non-recurring revenue problem, across all five
Two districts posted fiscal 2025 gains. Neither is repeatable.
Plano’s fund balance grew $3,386,247, from $273,013,221 to $276,399,468 — 1.23%. The growth came from a $22,600,000 initial Chapter 313 payment from Texas Instruments and a $31,400,000 state aid increase driven by an Available School Fund per-capita rate that rose from $423.747 to $619.868 per average daily attendance. The unassigned balance also rose partly for a mechanical reason: the assignment for budget deficit dropped from $35,000,000 to $7,800,000 as the prior-year deficit failed to materialize.
Frisco’s $22,494,543 gain came against a budgeted $30,800,000 deficit — a favorable swing of $53,294,543 — attributed by its audit largely to the TIRZ reallocation. A revenue stream can only be reallocated once. Frisco’s fiscal 2027 revenue of $751,900,000 is already down $19,790,000, or 2.56%, from the $771,690,000 budgeted for fiscal 2026.
McKinney shows what the year looks like without a one-time item: state program revenue fell $14,300,000, or 25%, expenditures rose 5%, and the fund balance absorbed $10,711,346.
Every one of these districts is one non-recurring item away from the structural gap becoming fully visible. Plano arrives there first because its recapture obligation compounds against it.
What this adds up to
The original post’s underlying claims survive scrutiny. Deficit budgets are widespread. Campuses are closing. Teacher compensation trails inflation in real terms. Mandated programs are underfunded — Plano projects six required programs costing $141,300,000 in 2026-27 against $66,900,000 in state funding, a $74,400,000 local subsidy for services no district may legally decline.
What the audited specifics add is precision about the mechanism. This is not uniform starvation. It is a formula in which per-pupil cost growth of roughly 4% annually meets a basic allotment that moved 0.89%, and in which one district’s recapture obligation consumes 20.12% of its budget while a larger neighbor’s consumes 1.83%. Plano and Frisco sit eleven miles apart under identical law, with a 6.48-point difference in fiscal outcome and a 44-day versus 124-day gap in usable reserves. That is a structural design problem, and a basic allotment increase alone will not solve it.
The 2027 session will decide two things: whether the basic allotment gets indexed to anything, and whether the education savings account program expands from $1 billion toward the $3.3 billion the Legislative Budget Board projects for 2028. More than 274,000 families applied for roughly 90,000 available accounts, leaving a waitlist above 180,000 students — now the most potent political argument in the building.
Districts should expect both dollars to be argued over at once, and expect the basic allotment to lose that argument again unless someone makes the recapture case with numbers this specific.
Note on data and method
Fiscal 2025 general fund figures for all five districts are audited, drawn from each district’s annual comprehensive financial report for the year ended June 30, 2025. All five received unmodified opinions — Weaver and Tidwell for Plano and Richardson, Hankins Eastup Deaton Tonn & Seay for Allen, Eide Bailly for McKinney. Fiscal 2026-27 figures are budgets as adopted in June 2026 and are projections, not actuals.
Percentage changes spanning more than one year are stated as compound annual growth rates; single-year changes are stated as simple percentage change. Days of operations are computed as fund balance divided by total general fund expenditures divided by 365. Recapture is function 91, contracted instructional services between public schools; per-student recapture uses each district’s most recent reported enrollment. McKinney and Frisco enrollment and cost-per-pupil figures are from ACFR statistical schedules and are fiscal-year figures on those districts’ own operating-expenditure definitions, which differ slightly — McKinney excludes debt service and most capital, Frisco excludes intergovernmental charges — so the cost-per-pupil CAGRs are comparable in direction but not to the decimal. Other districts’ enrollment is school-year data from board presentations.
One caution on the reserve comparison. The cash flow assignment — $170,000,000 at Plano — is technically available but functionally is not, because Texas districts collect the bulk of ad valorem revenue between December and February and need working capital to cover July through November payroll. Frisco’s audit describes the same four-to-five month cash flow deficit but carries the equivalent cushion as unassigned rather than assigned, and McKinney does likewise. Part of the 44-day versus 127-day gap is a real difference in liquidity and part is a difference in classification convention. The direction of the finding survives the adjustment, but the precise day counts should be treated as indicative rather than exact, and anyone using this comparison in testimony should say so.